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Thursday, August 31, 2006

Some loony web ideas that have made dopes like you rich

How slackers with one dopey idea are getting rich -- by MIKE MILIARD

One of the first big stories I ever reported, in the gloaming of the dot-com boom, was a 1999 piece for Forbes ASAP ranking the tech sector’s 100 richest executives. For six months, my co-workers and I plugged numbers from SEC filings into a vast spreadsheet, charting Web entrepreneurs’ holdings. All the while, we marveled. Even with the market’s wild undulations — eBay’s Pierre Omidyar, for instance, had $4 billion worth of stock on March 1, which then shot up to $8 billion (April 29) then all the way down to $2.8 billion (August 4), and up again to $4.7 billion (August 31) — the sheer numbers were hard to wrap our heads around.

For all its practical uses, the Web looked like nothing so much as a vast generator of wealth — money that had a pretty tenuous connection to reality, if it had any at all.

Of course, that vaunted bubble burst, spectacularly, a couple years later. (The intro to the Forbes piece notes that, by the end of its IPO, in ’99, eToys had a $7.7 billion market cap. eToys !)

Amazon.com’s Jeff Bezos is still a very wealthy man. So (of course) are Bill Gates and Steve Jobs. But as the Web has evolved, becoming more and more democratized, capable of being customized and used in ever more ways, a funny thing is happening. Regular folk are coming up with one simple idea, posting it online, and making millions. No IPO necessary.

A paper clip and a dream

Montrealer Kyle MacDonald, 26, is not a wealthy man. His primary career is preventing restaurant tables from wobbling. (Yes, really. Check out tableshox.com .) Buying a house seemed hopeless, far beyond his means. Then one day last July he started thinking about a game he used to play as a kid called Bigger and Better, in which, he says, you’d “start with something small, form teams, go around the neighborhood trading that something small for something bigger and better with each door you knock on.” He had a revelation: “Instead of working, what if I start playing Bigger and Better professionally?” He looked at a red paper clip on his desk. Eureka.

MacDonald logged on and registered a URL: oneredpaperclip.com . “I want to trade this paper clip with you for something bigger or better,” he wrote on July 12, 2005. “If you promise to make the trade I will come and visit you, wherever you are, to trade.… I’m going to make a continuous chain of ‘up trades’ until I get a house. Or an Island. Or a house on an island. You get the idea.”

Two days later, he traded the paper clip for a pen shaped like a fish. Then, not long after, he traded the pen for a door knob that looks sort of like E.T. after he’s smoked a joint. Then he traveled to Amherst to trade the door knob for an old Coleman camping stove. Then to San Clemente, California, to trade the stove for a 1000-watt Honda EX Generator. And on and on.

Along the way, MacDonald took pictures and videos, and wrote stories about the people he traded with. There was the guy in Maspeth, Queens, who traded a neon Budweiser sign and an IOU for a keg full of beer in exchange for the generator. The woman in Phoenix who owned a half-vacant duplex and traded a year’s free rent for 30 hours of studio recording time and 50 of post-production.

With all the publicity MacDonald got along the way, his quest snowballed. “I’ve had a million people come to the site since last summer,” he said when I first spoke with him last May. “In a month since then, I’ve had a million and a half more.”

MacDonald wanted a house, but he wasn’t just looking for a place on easy street. “I’ve been offered houses by online casinos,” he said then. “I’m not interested in getting a house for free. I’m interested in making trades with people that benefit myself as well as them.” All the same, he was in this till the end. “I don’t have a Plan B. This is all I’m doing. I’m not overconfident, but it’s to the point where, if I don’t trade a red paper clip for a house, I’m a total schmuck.”

He needn’t have worried. On July 12, a year to the day since he started the project, Kyle MacDonald signed the deed for a modest two-story in Kipling, Saskatchewan. He and his girlfriend, Dominique, will be moving out to the prairie province at the end of this month.

The way his quest reached its climax and denouement is even cooler. The first time I spoke to MacDonald, in May, his latest trading chip was an afternoon with Alice Cooper. Yes, Vincent Furnier himself. Clearly, this was his best bet yet. Hell, someone might even trade a house full up for it!

Then Kyle traded it for a snow globe.

His public, the people who’d been attracted to his site in droves by this time and were following his every move, were incensed. “You jumped the shark,” wrote one. “That’s the worst trade anyone has ever made,” griped another.

What they did not know was that MacDonald had a trick up his sleeve. Somewhere along the line, Corbin Bernsen, the actor, had learned of MacDonald’s quest. He was intrigued. And somewhere along the line, MacDonald had learned that Corbin Bernsen has one of the largest snow-globe collections in the world. (“Something like 60,000 of them,” says MacDonald.)

The dude who wanted to hang with Alice Cooper was told that the guitar he’d proposed as a trade was not gonna cut it. Other arrangements would have to be made. “A light bulb went off in my head,” says MacDonald. “I said, ‘This is gonna sound nuts, but do you have any snow globes?’ He said, ‘Yeah.’ I said, ‘What’s your best one?”

His best was a KISS snow globe.

And when Corbin Bernsen learned of this, he spake thusly: “Not only do I want that snow globe. I need it.”

So MacDonald flew to Tinseltown, where he traded with Bernsen for a speaking role in an “extremely-low-budget” movie called Donna on Demand .

And then, finally, the mayor of Kipling traded the house on Main Street in exchange for open auditions, which will be held there on Labor Day weekend. Media will descend from around the world.

When he flew to Saskatchewan to sign the deed, he was met at the house by Kipling’s mayor, members of Parliament, and, of course, a red-coated Mountie. (“A mountie ,” MacDonald chuckles, still marveling at the utter Canadian-ness of it all.) He’s become Saskatchewan’s biggest celebrity since Dick Assman, the Regina petrol-station owner who rocketed to fame in 1995, thanks to David Letterman.

And that, much more than the monetary value of a modest house in the middle of nowhere, is why MacDonald did this. Not to be the new Dick Assman, but to create a great story. “The amount of time I put into this” — about 3500 hours, he guesses — “is totally disproportionate to the monetary value of the house. But it’s the story that’s the real reward. I got to meet a lot of people.”

He also scored a book deal with Random House. And the one-red-paper-clip story has been optioned by DreamWorks. If both projects work out, the money they generate will make those hours well worth it.

(By the way: Kyle’s throwing a housewarming party in Kipling the same weekend of the auditions. Dick Assman is invited. You are too. BYOP.)

A buck a pixel

Alex Tew needed money for university. The 22-year-old from Cricklade, Wiltshire, England, was barely a month away from starting his degree program and already £4000 in debt. “I was not too happy about my financial situation,” he says over the phone from London.

So instead of just accepting it as a necessary evil, he sat up late one night, jotting some fundraising ideas in a notebook. “One of the things I wrote down was, ‘How can I become a millionaire?’ I sat there thinking for a while, and about 20 minutes later this crazy idea popped into my head. In order to become a millionaire I would sell a million pixels on the screen, and I’d sell them for a dollar each.”

Shazam. The Million Dollar Homepage was born. It was a crazy idea, with ostensibly little chance of actually working. But Tew “knew that things that were completely crazy would often get attention. And I knew that if I could generate some attention, then the pixels I was selling would have value.”

Still, he was far from convinced the site would live up to its name. “My original thinking was that if I aim high … If I aim for a million dollars but only get one or two percent, then that would still be ten or twenty thousand dollars, that would be a huge amount of money for me. So I kind of went into it thinking I had nothing to lose.”

He had no idea. Between the site’s going live and the auctioning off of the final 1000 pixels for $38,100, more than 3000 entities — from online casinos to novelty shops to free iPod gimmicks to absinthe vendors to political blogs to mp3 download sites to Jewish dating services to the London Times to a site selling pixels for 20 cents — rushed to snatch up online real estate. It took just four and a half months. “It took off so quickly. It’s still kind of surreal,” says Tew. “A year on, it still hasn’t sunk in.” (He says he “could have probably created a whole page just of adult sites” that contacted him, but, knowing the publicity the page would generate — and depended on — he opted to keep it clean.)

f it seems a little like gold prospectors flocking to Sutter’s Mill in 1848, it was. Sort of. Few who purchased pixels actually expected to get torrents of lucrative traffic suddenly directed to their sites. They paid simply to be part of one of those rare phenomena, those online events that, for a little while, at least, everyone is talking about.

Aided and abetted by the chattering legions of the blogosphere ( he kept a blog chronicling his adventures), Tew’s novelty page ended up doing just what he thought it might, becoming a “self-fulfilling sort of thing” that made him rich.

Not that it was easy. “A lot of people think I made this million dollars for nothing,” he says. “But I worked full time, really hard, for four and a half months. To suddenly go from nothing to having 3000 customers, over a short period of time.… I had no employees; it was just me, initially. And then the whole thing was happening while I was at university, so I was supposed to be doing lectures during the day, socializing at night, and running a full-time business.”

Besides being a business, the page is also something of a work of art: a day-glo mosaic of “contained spam,” a riot of word and image that almost hurts your eyes if you stare too long. What’s more, Tew says, it’s a time capsule. “I think it is quite a good reflection of the Internet at this point in time. It’s going to be the same image in ten years’ time, in twenty years’ time. This is permanent. But other than aesthetic and commemorative value, Tew has a confession: “it’s not that particularly useful, let’s be honest about it.” Except, of course, to make Tew a very wealthy man.

Meanwhile, there are reportedly more than 10,000 copycat sites, everything from the Zero Dollar Homepage (it’s free!) and the Million Pixel Gallery (it’s art!) to the Million Australian Dollar Homepage (it’s Aussie!). Few of them are more than half bought up.

To be sure, this is the kind of idea you kick yourself for not thinking of first. I know I did. And that’s just the point. Alex Tew thought of it. And now Alex Tew is a millionaire and you and I are not. Now he’s working on a “top secret” project. “[A]ll i can say is i aim to launch prior to the year’s end,” he writes, “and it could be really big.” I’m inclined to believe him.

The lizard king

Julian Dibbell is a successful freelance writer. His work has appeared everywhere from Harper’s and Le Monde to Wired . But for a while, about three years ago, he didn’t feel much like writing at all. He just wanted to kill lizard men.

In his new book, Play Money: Or, How I Quit My Day Job and Made Millions Trading Virtual Loot (Basic) Dibbell introduces us to the people who make money playing massive multiplayer online games (MMOs) like EverQuest or World of Warcraft .

They do it by working for months to create a character in these fantasy worlds, assiduously building their faux-reality bona fides through hours upon hours of game play, until they’re specialized and accomplished, with high-level skills and hefty coffers filled with millions of gold pieces. Or they do it by selling imaginary iron ingots or virtual real estate on eBay for real American dollars. One man even farmed out the labor, paying Mexicans in Tijuana real money — more than they would have made tilling fields — to play Ultima Online for hours every day while he profited from their “work.”

Dibbell has been spelunking these parallel worlds since before many of us even heard of the Internet. His Village Voice essay “ A Rape in Cyberspace ,” written in 1993 and describing a text-based online world called LamdaMOO, was a seminal work in exploring virtual reality. But all this is amazing even to him. It all represents something entirely new, he writes, “the traditional economics of the intangible being stretched to the point of surreality.”

Dibbell created a character and got down to it. At first, his interest was merely reportorial. That changed quickly. “The real motor online is the incessant involvement of players in these games,” he says. “It’s just very hard to get close to them without getting sucked into the addictive treadmill of achievement and acquisition. And I did. There I was, hunting lizard men and really obsessively trying to raise my level and acquire a little gold here and there. And it just struck me that this is ridiculous. I’m spending all my time on this career, which is an imaginary one. I’ve gotta cut this out, cold turkey, or I’ve gotta make this part of my career.”

So he did that too. He found it wasn’t just that he could score 30,000 gold pieces for every thousand sheets he harvested of leathery lizard-man skin. And not just that those gold pieces could be traded up in the virtual bureau de change that is eBay for cold, hard American greenback. (At press time, 100 million gold pieces are being auctioned for $119 on the site.) What he found was that, while one red paper clip and the Million Dollar Homepage are “brilliant examples of the sort of one-off stunts that people can pull off to make money,” this is something more: “a solid, robust economy that is not going away.”

By the end of the year or so that he played Ultima Online “professionally,” he pulled down about $11,000. A paltry salary for most jobs to be sure. But not bad for a video game.

In a way, it’s not all that hard to believe that this sort of thing, a replacement — or at least a supplementation — of the Protestant work ethic with an economy of online play, could actually happen on a large scale. “Go back to Mesopotamia, the early days of human civilization,” Dibbell says. “The whole economy is about growing wheat and turning it into bread, and everything else is just sort of frills. Go to a peasant working on the field and say, ‘This is the center of your economic world, but see those guys over there learning how to write and scribble? Y’know, that looks really silly, but that’s gonna be the center of gravity in the economy in 10,000 years.’ Imagine how crazy that would have sounded? I don’t think it’s too much more ridiculous to say this game economy, once it’s developed its own momentum, could be as big as any sector out there.”

Especially, he says, “because the agricultural economy, the industrial economy, those things are all limited by hard physical resources. There’s sort of an untetheredness to this. These economies just sort of feed on themselves. Who needs a frickin’ orc-slaying sword that they can’t hold in their hands? Nobody. But once enough people really want it, that’s something you can need. [In] the first wave of blather and hype about the Internet, what was totally missed was that the Internet would create its own needs, its own kind of desirable goods that were completely unpredictable.”

In other words, as wooden as he sometimes seems, when Al Gore invented the Internet he might have been spearheading something even more revolutionary than he could have known. For countless generations, Dibbell writes, that Protestant work ethic “managed to convince us all, even the defenders of play, that play was pure waste. But now there are virtual economies, and virtual economies present the single counterexample necessary to destroy the Puritan hypothesis: an example of productive play.”